Although 2022 has been a volatile time for the global economy, the legal cannabis industry continues to record strong growth and we have been highly focused on the opportunity in the United States (US).

From 2014 to 2020, the west coast of the US dominated the cannabis industry. During the last two years, the landscape of the US cannabis industry has changed and a few states in the Midwest and on the east coast have become major markets.

When it comes to the US cannabis industry, we believe the Northeast is a region that is in the early innings of a major growth cycle and our readers should be aware of this. In the near future, New Jersey will start to allow for the sale of recreational cannabis and is a Northeastern market that we are bullish on.

Are Projections for New Jersey’s Recreational Market Accurate?

According to MJBizDaily, New Jersey’s recreational cannabis sales are expected to be $775 million in 2022 and should increase to more than $2 billion in annual sales by 2025 or 2026. We are bullish on the expected spike in cannabis sales revenue and expect companies with leverage to New Jersey to record strong growth.

While we are favorable on MJBizDaily’s forecast for recreational cannabis sales in New Jersey, we believe the state’s projections might prove to be inaccurate. The four operators that recently were granted a vertically integrated medical cannabis license are not yet operational and we will monitor how long it takes them to start generating revenue in New Jersey.

According to data from New Jersey, the state only has 11 licensed medical cannabis businesses which operate 23 dispensaries. New Jersey regulators recently approved four vertically integrated medical cannabis licenses, 10 cultivation permits, and 30 dispensary licenses to support the medical cannabis industry.

A key reason for us believing that New Jersey’s cannabis sales forecasts could be inaccurate is related to timing. It is impossible to determine when recreational cannabis businesses in the state will be operational and based on what we have seen in Massachusetts, we do not want to get our hopes up. Until the market opens, we will refrain from making projections on the potential size of it and will monitor how the industry evolves from here.

The Northeast is the New Frontier for the US Cannabis Industry

Other Northeastern cannabis markets we are focused on are Massachusetts, New York, and Pennsylvania. Although we are favorable on these markets, New York has been slow to allow for the sale of recreational cannabis and Massachusetts’ recreational market has not grown as fast as we expected. Once recreational cannabis is allowed to be sold in New Jersey, MJBizDaily expects the state to quickly surpass Massachusetts from a cannabis sales standpoint.

Pennsylvania is a Northeastern market that we are bullish on and expect recreational cannabis to be legalized in the state in the near future. Earlier this week, a state Senate committee held the last of three scheduled hearings on cannabis legalization to help the panel’s chairman draft reform related legislation.

We believe the success of Pennsylvania’s medical cannabis market is a bullish indicator for the state and have identified operators that would benefit from the legalization of recreational cannabis. We consider Pennsylvania to be an underappreciated market and believe our readers should be aware of how the market has advanced in recent years.

If you are interested in learning about US cannabis companies that are levered to the Northeast, please send an email to support@technical420.com with the subject “Northeastern Cannabis Operators” to be added to our distribution list.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.